It is only days away to the Olympic games of 2012. This is a great time to reflect on how hard the athletes have been training for the greatest run, swim or long jump of their life. I applaud them and negotiators who are successful without any performing enhancing drugs.
Let’s move quickly away from the world of sport to negotiations. When we prepare for a major deal, recent research from Harvard Law School would suggest that most people can experience emotionally challenging negotiations. The only way to prepare for this is to ensure that you balance your preparation with the key people in the other party and the substantive issues in the deal.
When consulting with our clients on large deals we do a lot of ground work and stakeholder mapping about the key people in the negotiation. The interesting thing is that a lot of emotion disappears when our team realizes that even if the other side is aggressive we don’t need to react the same way. Again, the research from Harvard and other sources support our experience that says whether you are negotiating with your board of directors in a business setting or with external partners, as the buyer or as the seller, emotions can turn an otherwise productive negotiation into an unprofitable disaster.
Here is where training helps; as we prepare for live deals, we will have teams actively involved in negotiation simulations so that they are developing their negotiation muscle for the live deal. Our negotiation framework helps them better understand and address the challenging, emotional dynamics that arise in everyday business negotiations.
The second thing that we work on to prepare our team for sometimes having to deal with a bare knuckle negotiation, is to be better prepared on the substantive issues. My experience is that being better prepared on your substantive issues puts you into a powerful position when negotiating. So at a practical session we run meetings to problem-solve the possible outcomes of the negotiation. From this process we often discover many ways to build stronger value into the substantive issues.
A quick tip, a substantive issue is measurable, so when you have a long list of substantive issues make sure that you can measure them; speed to market, quantity, DIFOT, price, etc.
The good news is that if you are well prepared, you will win gold. If not, ring me.